Opinion

Curtain has come down far too soon on banking inquiry

“We will adjourn.” With those three words, Kenneth Hayne bowed and drew the final curtain down on the royal commission into misconduct in the banking superannuation and financial services industry.

If there was a sense of disquiet it was due to the topics and institutions that had been missed from this short yet headline-grabbing event.

Commissioner Kenneth Hayne at the Royal Commission.Credit:Fairfax Media

In the 68 hearing days, covering 134 witnesses and thousands of exhibits we have seen dishonesty and entrenched conflicts of interest. We have watched the flawed, arrogant – and sometimes contemptuous - leaders that run the nation's biggest financial institutions.

We have had rampant, institutionalised corruption on full display.

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Regulators negotiating soft outcomes and compensation delayed for years, have been common themes.

The royal commission has already had a profound impact on these organisations.

It hasn’t gone far enough or deep enough. Time and limited terms of reference were the royal commission’s enemies.

ASIC has promised to become tougher, APRA will do better.

Companies have moved too. Some have banned grandfathered commissions, divisions have been shut down or spun out, dodgy products cancelled and some high profile players have departed.

But it hasn’t gone far enough or deep enough. Time and limited terms of reference were the royal commission’s enemies.

How else can it be explained that Macquarie Bank appeared for less than an hour?

Or that the $1.7 trillion superannuation industry with all its complexities was allocated two weeks?

Or that some institutions, divisions and industries, including consultants, missed out completely?

Prime Minister Malcolm Turnbull “reluctantly” called the royal commission a year ago it was only after the banks had written to him beseeching him to press the button and take control of the inevitable.

His reluctance resulted in a 12-month royal commission that was never going to be adequate given the size, intricacies and magnitude of what it was covering and the sophistication of the misconduct.

As council assisting Rowena Orr said in her closing speech, it has been “enormous”.

Rowena Orr QC.

The commission could have lobbied for broader scope and more time in response to that enormity. Sadly Kenneth Hayne never did.

For the victims who wanted their stories told, most never stood a chance. With a 12 month deadline, it was always going to be an uphill battle.

Presented with more than 10,000 submissions fewer than 30 victims were called. For thousands it was a missed opportunity for some closure.

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It also prevented the commission hearing firsthand the lives destroyed by greed, dishonesty and a lack of accountability. This would have been potent and useful.

A lot of evidence was left to the banks to supply. As history has shown, self reporting can be problematic.

Asking institutions to list their own past misconduct was fraught with risk.

Take CBA’s Dollarmites school banking scandal where tellers were fraudulently activating kids accounts to meet targets and earn bonuses. It didn’t make the bank’s sin list that informed the commission's lines of inquiry.

What other scandals by CBA and others didn’t quite make their cut?

Matt Comyn's hand written note from the banking royal commission with quote (highlighted) he attributes to former chief executive Ian Narev.

Many of the executives called to the stand were relatively new in their jobs, which meant they either couldn’t answer the questions or were allowed to be vague or dismissive in their responses.

Besides being frustrating, it allowed former executives and directors to avoid being held accountable.

This was no better illustrated than CBA chief executive Matt Comyn’s testimony which effectively threw former executives Ian Narev and Annabel Spring under the bus.

Comyn famously claimed Narev told him to “temper your sense of justice” when Comyn complained about the bank's sale of an often worthless insurance product to its customers. But the commission never called Narev to put that claim to him.

Yet the royal commission has put the spotlight on the sector like never before. Rowena Orr’s performance has been stellar, along with Hayne’s razor sharp summaries.

Seeing the arrogance and blatant disrespect pouring out of NAB chairman Ken Henry in full throttle, the clay feet of Commonwealth Bank chairman Catherine Livingstone and the contempt of IOOF’s Chris Kelaher speaks volumes about the culture of those businesses.

In the end we will have the recommendations, an election campaign and Labor’s next move.

The opposition is in the box seat to push for further mini royal commissions to give the people a voice and air those topics, institutions and people that it missed – or it can move on.

This is a moment in time that won’t easily be re-captured. Let’s hope it isn’t squandered.